Moffat leaves IBM after insider trading arrest

Bob Moffat - IBM's top server, storage, and chip exec - has left the company following his arrest for alleged involvement in an insider trading scam.

Moffat was arrested by the FBI on October 16 and charged by the US District Attorneys office in Manhattan, along with five others, in an alleged insider trading scam that allowed hedge funds Galleon Group and New Castle Group to benefit to the tune of more than $20m. The original complaint (PDF) filed on October 16 Danielle Chiesi, of New Castle, indicating that Bob Moffat passed her inside information.

The complaint alleges that Moffat provided information regarding the impending spinoff of Advanced Micro Devices' chip making business and the quarterly financials of IBM and Sun Microsystems ahead of when they became public, thereby helping New Castle engage in insider trading in shares of those companies as well.

On October 19, IBM put Moffat on a temporary leave of absence and tapped Rod Adkins, senior vice president of development and manufacturing for IBM's Systems and Technology Group, to be the temporary head of STG (taking control of the server, storage, and chip lines and their marketing) while retaining his other job managing development and manufacturing operations.

This morning, in an internal announcement to IBM's employees, the company released the following statement: "Rod Adkins, who was named acting head of IBM's Systems and Technology Group on October 19, has been appointed senior vice president of STG. Bob Moffat, who had been placed on leave of absence as a result of a US Federal investigation into his personal activities, is no longer an employee of IBM."

Moffat, as El Reg pointed out earlier this year, was one of the prime candidates to replace Sam Palmisano, IBM's president, chief executive officer, and chairman, in at least one or two of those roles.

It is not clear if Moffat left IBM or was asked to leave. "IBM has a policy of not commenting on the personal issues of current or former employees," explained spokesperson Ed Barbini.

Adkins was also in the hunt for one, two, or three of the top jobs at IBM, and his odds of talking the helm just went up dramatically, particularly if IBM turns its server business around in the coming quarters and the Power7 RISC system and z11 mainframe system launches next year go well. It would not be at all surprising to see one of a handful of executives named president of IBM next year and thereby being anointed the designated successor to Palmisano, much as Palmisano was given that title when Louis Gerstner was approaching retirement. ®